Shanghai steel futures jump on expectations of output controls
BEIJING, July 7 (Reuters) - Chinese steel futures jumped on Wednesday, with construction rebar and hot rolled coils both closing up more than 3%, fuelled by expectations of production cuts.
"Recently the anticipation of reducing crude steel output has made a comeback," SinoSteel Futures said in a note, adding that some local governments have issued related documents although details are pending further notice.
The most actively traded construction steel rebar on the Shanghai Futures Exchange, for October delivery, rose 3.3% to 5,439 yuan ($840.99) per tonne at close.
Hot rolled coils, used in the manufacturing sector, jumped 3.8% to 5,768 yuan a tonne, the highest closing price since May 19.
The August contract for stainless steel on the Shanghai bourse inched up 0.3% to 16,825 yuan per tonne.
Prices for steelmaking ingredients were mixed on the Dalian Commodity Exchange.
Benchmark iron ore futures, for September delivery, recovered from drop in morning session and ended up 1% at 1,244 yuan a tonne.
"Market participants have started to trade based on the expectation for lower output... while iron ore fundamentals also not supporting big gains in its prices," according to SinoSteel Futures.
Coking coal futures on the Dalian bourse declined 2.4% at 1,932 yuan a tonne.
Coke prices slid 2.4% to 2,619 yuan per tonne.
FUNDAMENTALS
* Spot prices of iron ore with 62% iron content for delivery to China <SH-CCN-IRNOR62> increased by $1 to $222 per tonne on Tuesday, according to SteelHome consultancy.
* China's state planner said it aims to boost steel scrap usage by 23% in the next five years to 320 million tonnes to increase supplies and meet the country's climate goal.
* China's national reserves administration said it would continue to release stocks in the near future after completing the auction of 100,000 tonnes of copper, aluminium and zinc on July 5.
($1 = 6.4674 Chinese yuan renminbi) (Reporting by Min Zhang and Shivani Singh; Editing by Amy Caren Daniel)
